Automakers and suppliers are breaking ground on battery factories across the United States as they race to go all in on EVs by the end of the decade.
Car companies and suppliers such as LG Energy, SK Innovation, Panasonic and Samsung are investing more than $38 billion through 2026 to boost battery production in the U.S., according to AlixPartners. In July, Kansas and North Carolina each announced the largest economic development projects in their histories, and Ford finalized a deal to bring its battery production to Tennessee and Kentucky.
This is just the start of a boom in onshore battery manufacturing: The Inflation Reduction Act, which includes tax credits to encourage domestic production of electric vehicles and batteries, offers manufacturers $30 billion in credits to speed the production of batteries and minerals processing, as well as solar panels and wind turbines, and $10 billion to build plants for EVs and solar panels.
The multiyear projects already announced won’t begin producing batteries for EVs until middecade, but shortening the supply chain will ultimately help manufacturers control costs and reduce dependence on foreign sources for raw materials. Building a domestic battery industry also lets automakers co-locate near partners, a crucial factor as the industry begins experimenting with different battery chemistries.
“This way you’re in that feedback loop that allows you to innovate and reengineer so that you always have a constant advantage and are meeting the market versus dealing with several suppliers in the chain,” said Arun Kumar, managing director of AlixPartners’ automotive and industrial practice.
“Imagine that you’ve got all the engineering, design, marketing and sales figured out, but then you don’t have enough lithium-ion batteries to produce and sell those vehicles,” Kumar added. “If you fall two years behind, you’re as good as lost because then you’re going to struggle with trying to capture the market.”
Here’s a look at some of the major projects underway:
Panasonic
Panasonic plans to build a $4 billion battery plant in Kansas that will manufacture and supply lithium-ion batteries to EV makers. The factory is slated to be larger than the Gigafactory it operates with Tesla in Sparks, Nevada, which is already one of the largest lithium-ion battery factories in the world. Panasonic said the Kansas site will be “one of the largest EV battery manufacturing facilities of its kind in the U.S.” The deal represents the largest economic development project in Kansas history.
Toyota
Toyota is building a $1.3 billion battery plant near Greensboro, North Carolina, that’s slated to start production in 2025. The Japanese automaker said its first U.S. battery factory will supply 1.2 million EVs annually, furthering its goal of selling 8 million EVs a year by 2030.
VinFast
Vietnamese EV maker VinFast received $1.2 billion in incentives to build a factory in North Carolina as part of the state’s largest-ever economic development project. Construction on the 2,000-acre site at the Triangle Innovation Point in Chatham County, North Carolina, will start in the second half of the year. VinFast said it will begin building cars there in July 2024, ramping up to an annual capacity of 150,000 vehicles. The $2 billion EV factory will make the VinFast VF 9 three-row SUV and the VinFast VF 8 midsize SUV.
Tesla
Tesla opened a $1.1 billion Gigafactory in Austin this spring. The 10-million-square-foot facility produces Tesla’s new 4680 cells to integrate into the battery packs for its vehicles. The plant also builds the Model Y compact crossover, the best-selling EV in the U.S. Tesla has since filed plans to expand the factory by an additional 500,000 square feet to produce one of the world’s largest EV manufacturing hubs.
Mercedes-Benz
Mercedes-Benz opened in April a battery plant in Bibb County, Alabama, to supply its battery-electric portfolio of Mercedes-EQ vehicles, including the EQS full-size SUV and EQE midsize SUV. The German automaker said that the factory “underscores the importance of the United States within the Mercedes-Benz global production network and the status of Alabama as an export hub for luxury SUVs also in the electric era.”
Ford
Ford and South Korea’s SK On closed a deal to create an $11.4 billion joint venture to build and operate the Blue Oval City complex in Stanton, Tennessee and two EV battery plants in Glendale, Kentucky. The Stanton site will build Ford’s battery-electric F-150 Lightning pickup.
SK On
Separate from its joint venture with Ford, SK On is building a $2.6 billion EV battery complex near Rivian’s factory in Georgia. The company said its plant will be able to power 310,000 electric vehicles annually.
Hyundai
Hyundai, which has pledged to spend more than $10 billion in the U.S. by 2025 to develop technology for EVs, AVs and robots, plans to open a new EV plant and battery manufacturing facility in Georgia. The automaker will invest $5.5 billion to develop the 2,293-acre site.
Hyundai said the plant will begin production in 2025 with the capacity to build 300,000 vehicles per year, including at least some of the 23 EVs it plans to roll out by 2025. The project represents the largest economic development deal recruited by Georgia.
Rivian
Georgia has become aggressive in its efforts to attract manufacturers, awarding Rivian the state’s largest-ever incentives package of $1.5 billion to build a plant on 2,000 acres east of Atlanta. In return, Rivian has pledged to hire 7,500 workers at an average annual salary of $56,000 by the end of 2028. However, the project has stirred local controversy; residents have rallied around concerns ranging from land preservation to the use of tax dollars.
Rivian plans to break ground this summer and open by early 2024.
Stellantis
Stellantis said in May that it’s teaming up with Samsung SDI to build a $2.5 billion lithium-ion battery plant in Indiana. The project is Stellantis’ first battery plant in the U.S. and its fifth worldwide.
The site is slated to open in 2025 near Stellantis’ engine, casting and transmission plants in Kokomo, Indiana, where the company is also investing $229 million to produce electrified eight-speed transmissions to help reach its goal for EVs to represent more than half of its U.S. sales by 2030.
General Motors
GM plans to open three battery plants in the U.S. to produce the Ultium Cells that power its EVs. Its first facility, in Lordstown, Ohio, is slated to open in August. The automaker will begin production at its plant in Spring Hill, Tennessee, in late 2023, followed by a facility in Lansing, Michigan, in late 2024.
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